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Guys i have theses questions and i have no idea on how to do any of them, could you explain how to do each question with formulas.
Guys i have theses questions and i have no idea on how to do any of them, could you explain how to do each question with formulas. and then what answer you would have obtainedBecker Industries is considering an all equity capital structure against one with both debt and equity. The all equity capital structure would consist of 26,000 shares. The debt and equity option would consist of 15,000 shares plus $270,000 of debt with an interest rate of 7 percent. What is the break-even level of earnings before interest and taxes between these two options? Ignore taxes.1. $24,123.272. $26,803.643. $18,762.554. $44,672.735. $21,442.91Martin and Sons (M and S) currently is an all equity firm with 50,000 shares outstanding at a market price of $15 a share. The company's earnings before interest and taxes are $80,000. M and S has decided to add leverage to their financial operations by issuing $450,000 of debt with an 8 percent interest rate. This $450,000 will be used to repurchase shares. You own 1,200 M and S shares. You also loan out funds at an 8 percent rate of interest. How many of your shares in M and S must you sell to offset the leverage that the firm is assuming? Assume that you loan out all of the funds you receive from the sale of your shares.1. 720 shares2. 770 shares3. 670 shares4. 820 shares5. 620 sharesYour firm has expected earnings before interest and taxes of $1,600. Your unlevered cost of capital is 11 percent and your tax rate is 34 percent. You have debt with both a book and a face value of $2,400. This debt has a 6 percent coupon and pays interest annually. What is your weighted average cost of capital?1. 10.20 percent2. 11.05 percent3. 10.37 percent4. 10.67 percent5. 10.14 percent
